Grains were mixed today with corn finishing strong while beans and wheat were both lower. May corn settled 5 ¾ cents higher at $6.60 ¾, May beans down 8 cents at $13.25, and May wheat down 2 ½ cents at $6.72.
New money seems to be coming into the corn market as they continue to "bullspread". May-Dec corn spreads are now trading +89.5 cents. This spread was trading at a high of $1.2375 last August and a low of 43.75 cents in December. There were rumors of more export business that had the market excited today but it was more or less the same story: heavy money flow into bullspreading. Even the Nov 2012 – Nov 2013 soybeans spread gained 3 ½ cents today to settle at a new spread high of +78.5 cents. The market is obviously concerned over supply shortages for this year and next. This is all at the same time that we are seeing increases in the weekly ethanol stocks, decreases in weekly ethanol production, and lower on feed numbers. For beans we have been running behind pace on USDA export expectations. Many areas are pointing towards higher carryouts than expected for corn/beans but the market doesn’t seem to agree with those assumptions… at least for now. These market swings can present great opportunities to get caught up on sales if needed.
Chart: May – Dec Corn Spread
Chart: Nov12 – Nov13 Soybean Spread
I talked on Friday about some technical targets for corn and soybeans. May corn finished on the trendline resistance after trading above it for some time today. May soybeans managed to close lower after touching the 61.8% retracement level. This was the first day in 10 trading sessions that beans closed lower. Beans have been gaining on corn for the past month and we may be seeing a corrective move today.
Chart: May Soybeans
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